Textron gets boost

April 10, 2009|By Bloomberg News

Shares of Textron Inc., the owner of Hunt Valley-based defense contractor AAI Corp., rose almost 50 percent Thursday after Kuwait's Al-Watan newspaper reported that a United Arab Emirates group is preparing to buy the maker of Cessna aircraft and Bell helicopters for $21 a share.

Providence, R.I.-based Textron surged $4.45, or 49 percent, to $13.56 on the New York Stock Exchange. A deal at $21 would value the company at $5.1 billion based on 242.9 million outstanding shares. After an inquiry from the NYSE, Textron responded that it doesn't comment on market rumors.

The company's shares have fallen from a 52-week high of $65.52 on May 30 as the global credit crunch and recession reduced demand for aircraft and raised risks in its finance unit. Textron is withdrawing from its financing businesses other than those directly related to its manufacturing units.

The Kuwaiti newspaper didn't identify its sources. The buyers are interested in the civil operations of Textron and will sell its defense operations to a U.S. company involved in the negotiations, Al-Watan said.

Textron bought AAI in 2007 in a $1.1 billion deal. AAI makes small, unmanned spy planes.

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